LIC, Mankind Pharma, Aurobindo Pharma, Godrej Properties, Birlasoft, Metropolis, Symphony & More Q2 Review

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Institutional Equities

LIC - Margin expansion to continue; maintain Add

Life Insurance Corporation of India printed a beat on APE growth (+3% YoY), led by group business growth (+20% YoY). Value of new business grew 12% YoY as VNB margins clocked in at 17.6% (+136bps YoY), ahead of expectations, driven by efficiency gains.

Traditionally focused on the mass customer segment, LIC has engineered a shift in its product strategy towards higher sum-assured, non-PAR policies (FY25: 28% of new business).

LIC derives its moats from a large agency channel while undergoing a strategic shift in its individual product proposition to align itself to the new surrender guidelines.

We revise our APE/VoNB CAGR to 5/9% over FY25-FY28E and expect VNB margins to expand to 19.6% by FY28E.

We revise our RoEV forecasts for FY25-28E to 9.6%, on account of unwinding and VNB; maintain Add with a revised target price of Rs 1,065 (0.7x Sep-27 EV).

Mankind Pharma - Domestic recovery in H2 FY26; BSV integration key

Mankind Pharma Ltd.'s Ebitda (+8% YoY) was 6% below our/consensus estimates as 20% YoY sales growth (India formulation up 15% YoY and exports +14%) was offset by muted gross margin (-29 bps) and higher staff and SG&A costs, resulting in 24.9% margin (-271 bps). Organic (ex-BSV^) sales grew ~6% YoY, India formulation was moderate at 6.6% YoY (ex-OTC), and exports grew in mid-single-digit, offset by GST-related disruptions and uneven monsoons in consumer healthcare business.

For FY26, Mankind expects the following:

1. India organic growth to recover in H2 FY26, led by volume growth, traction in key chronic segments (CVS and anti-diabetic), recovery in acute therapies; it hopes to outperform IPM growth by 1.1-1.2x,

2. BSV: 18–20% growth is projected, led by exports growth of 18-20% and 15-16% growth in India business, targets to improve margin in the near term to reach its guided range of 26-28%, and

3. Margin: to achieve lower end of its Ebitda margin guidance of 25–26% (vs 25.4% in FY25) in FY26.

While the BSV acquisition will be Ebitda-accretive, the debt-funded M&A could keep near-term earnings stressed.

We have cut EPS estimates for FY26/27 by 5/3% to factor slow recovery in its domestic business, lower-than-expected margin guidance, and delay in synergies with BSV.

Accordingly, we have cut our multiple to 35x from 38x and revised target price to Rs 2,530 (35 times Q2 FY28E). Add stays.

We keep monitoring the progress in BSV business integration as well as growth momentum and debt repayment targets.

Aurobindo Pharma - US recovery, steady EU, and biosimilar assets key

Aurobindo Pharma Ltd.'s Ebitda grew 7% YoY, aligning with consensus estimates, as sales increased 6% YoY (US up 2% QoQ; EU up 18% YoY) and gross margin improved by 88bps YoY, though this was offset by a 15% YoY rise in staff costs.

Excluding gRevlimid, Ebitda growth was ~14% YoY. Aurobindo Pharma retained its guidance for high singledigit growth (ex gRevlimid) in FY26 and expects to sustain momentum in the coming years, led by-

1. continued growth in the US OSD business through new launches, improvements in injectables, normalization of Eugia-3 plant supplies (pending re-inspection in H2 FY26), and the Lannett acquisition;

2. sustaining Ebitda margins at 20–21% in FY26, with operating leverage supporting margins in subsequent years;

3. strong growth in the EU, targeting or exceeding Euro 1 bn in sales for FY26, with improved Ebitda; and

4. scaling up the biosimilar business, with four launches in the EU and stronger traction expected from FY27.

After factoring in Q2 results and higher tax outgo, we have reduced EPS estimates by 4/1% for FY26/27E and revised the target price to Rs 1,260 (16x Q2FY28E). Add stays, led by improvements in the US base business, steady EU growth, ramp-up in Pen-G/ China/US plants, and gradual biosimilar scale-up, all likely to drive steady mid-to-long-term growth.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.